Dollar Rises as Iran Tensions Escalate
The US dollar ticked higher on Wednesday due to renewed tensions in the Gulf region. The escalation of violence has investors seeking safe-haven assets, which has contributed to the greenback's increase.
Oil prices rose after the United States and Yemen's Iran-aligned Houthis reported separate attacks on shipping, with Tehran stating that the Strait of Hormuz would remain closed unless Washington accepts its conditions. This development has heightened concerns about the economic impact of the energy shock from the Iran war, leading investors to buy the dollar.
Fed Bank of Chicago President Austan Goolsbee echoed this view, stating he was more concerned about too-high inflation than labor market weakness. Analysts expect US inflation data due later on Wednesday to show a pickup in prices last month after easing in June.